6.1. Production and Suppliers
Coffee. “Finca Los Andes” will be our main supplier for coffee beans. They will deliver the beans as needed. The coffee beans will be the base for our baristas to prepare the different drinks at our café. One expresso shot needs an average of 9 -10 grams of ground coffee43, which means that 1 golden quintal -46kg- can served up to 4,600 expresso shots.
Food. We are choosing “PriceSmart El Salvador” wholesaler to distribute the raw materials – fruits, vegetables, etc.-. This wholesale offer special prices for business, free consulting in products, email ordering-purchase and delivery service. In addition, they have credit payment options from 15 to 45 days44. As we mentioned before, “PriceSmart El Salvador” has a branch in Santa Elena, making delivery and communication fast and convenient.
6.2. Inventory Management
One of OHANA´s company values is consciousness, we offer a healthy choice for our customers. Thus, inventory management is highly important to keep up with the quality standards of fresh and healthy that we´ll provide. The inventory will be registered on a weekly basis, counting the items of the beginning of the week, purchases and ending inventory, later to be compiled in a monthly basis. Managing a weekly inventory, although requires spending more time, is a good practice for food retailers not only to keep the fresh ingredients and make purchases as necessary, but to avoid food waste. As we´ll work with perishable items, is necessary to keep the inventory turnover as low as possible, less than seven days.
In addition, the information compiled will serve to develop cost related metrics. For instance, there is a metric to assign specific food cost to total cost, by tracking the main ingredients of an item, the sales and how much we are spending on them. These metrics can help to detect most
43Standards are provided by Specialty Coffee Association Of America, yet baristas could choose to add 1 or 2 grams more to provide a stronger taste.
44 PriceSmart El Salvador. https://www.pricesmart.com/site/es/sp/business-services
‧
popular or costly items on the menu, in order to redesign a menu, discontinue a product or analyze consumer tendency for new items45.
6.3. Legal Environment
There are several permissions and laws that OHANA Play Café, as food service business, needs to comply. To resume the most important, they can be divide in two categories company and labor.
Company. We need to register OHANA Play Café corporation in several agencies:
• Commerce Registry. A process to subscribe OHANA as a corporation in a public registry with a cost of $690 USD approx.46
• Registry of MYPEs. This will grant us the status of micro and small enterprise. It is a free process followed by CONAMYPE.
• Brand Registration and Commercial Name. To register “OHANA Play Café” brand and logos, according to the law after registration we are guarantee the exclusiveness of the name for 10 years, being able to renew the brad registration. There is cost of
$153 USD Approx. for both procedures.
Employee Benefits. In El Salvador, employers have two main payment obligations related to employees benefits the social security fee –ISSS- and the retirement pension contribution.
Currently, the ISSS fee is 10.5% of the employee´s salary, from that percentage 7.5% are cover by the employer. The retirement contribution is 10.8% of the salary, OHANA is responsible to pay 4.55%. In addition, companies in El Salvador need to register in the Ministry of Labor.
6.4. Personnel
OHANA Play Café will be open from Tuesday to Sunday, resting on Monday. The business hours will be from 11:00 to 18:30 from Tuesday to Friday. On the weekends, we will open from
45 Investopedia. “Key Financial Ratios for Restaurant Companies”.
https://www.investopedia.com/articles/financial-analysis/090316/key-financial-ratios-restaurant-companies.asp
46 Government of El Salvador. Procedures information. https://tramites.gob.sv/procedure/3/3?l=es
‧
10:00 to 19:00. There are three types of employees OHANAsitters, baristas and kitchen staff.
There will be two OHANAsitters –for each zone of the Kiddie Area-, one barista and one person in the kitchen. We don’t need a waiter, because orders will be taken at the cashier station next to the barista. The manager –myself- will be at the cashier station taking the orders and process payment. Overall, positions will have a rotational schedule to guarantee cover in all business hours and the 40 weekly working hours allow by the labor law.
Thus, our complete staff will be:
• OHANAsitters: 3
• Baristas: 2
• Kitchen staff: 2 (1 is part time)
• Store manager: 1
As for staff accreditations, some will be pre required and others will be provide by OHANA Play Café by trainings and courses. Both the position of main barista and kitchen staff will need to have a certificate of attending a cooking school, with a mention of bakery diploma.
Nonetheless, if the candidates have proof of working experience in coffee shop or bakery, they can also be accepted. As for the OHANAsitters, applicants need to have studies in nursing or education.
We´ve assigned an annual budget for training and certificates, as part of our commitment to customer service and continue learning development of our employees. The employees will be selected in an annual rotationally basis, encouraging peer to peer coaching. The one who receives the training, can share their knowledge to the coworkers. “Universidad Pedagogica El Salvador”, the lead university in education studies, offers a four month course in Montessori teaching method useful for our OHANAsitters. In addition, the Salvadoran Coffee Agency has a coffee school for baristas. Furthermore, to improve customer services, there is a popular one week course about the “Magic of Walt Disney”, where participants learn the techniques about how to build rapport with the customers and the right attitude at work.
‧
This section contains OHANA Play Café financial information and analysis, based in the following assumptions:
• OHANA Play Café will be using funding of three investors.
• The Sales will increase 10% every year. Details about the Sales Forecast calculation will be explained in section 7.2.
• There will be an increase of 10% in Inventory every year.
• Equipment will be depreciated using the straight-line method. See Appendix F.
• Salaries expenses will increase 10% beginning the third year. See Appendix D for salaries expenses break down.
• Tax retention is based on Salvadoran Law. There are two taxes, a 13% sales tax and a 25% income tax.
7.1. Startup Expenses
OHANA Play Café will need an initial investment of $47,528.14 USD. This investment will cover by three main investors, two family members -$20,000 USD each- and myself. Details are explained in Table IV. See Appendix C for further details about each component.
Table 4. OHANA Play Café. Startup Initial Investment
Initial Investment Summary Amount in USD
Cash $7,000.00
Equipment and furniture $9,224.00
Inventory $4,956.00